"What’s in a shade? The market relevance of green bonds’ external reviews"

Marco Ghitti Department of Economics and Management, University of Padua
Gianfranco Gianfrate EDHEC Business School
Florencio Lopez-de-Silanes SKEMA Business School, Universite Cote d'Azur & NBER
Marco Spinelli EDHEC Risk Institute

Investigating the informative content of Second Party Opinions (SPOs) issued by external reviewers to assess the quality of green bonds, the authors show that the market assigns a premium to the bonds with the best SPOs' valuation.

However, in presence of a formal credit rating, the external reviews do not appear to incorporate distinctive information priced by the market.

Responsible investors do appear to rely on the judgment of external reviewers when a formal credit rating is absent, and they have significantly higher stakes in the greener bonds.


Read their "British Accounting Review" article here